Carmen Reinicke and Jeran Wittenstein

Updated Fri, May 23, 2025, 8:01 AM5 min read

(Bloomberg) — CoreWeave (CRWV) Inc. shares have been on a tear as investors snap up the stock despite widespread concerns about elevated debt levels, the rate of cash-burn and the long-term demand for the cloud-computing services it provides.

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The shares have more than doubled in price in May after CoreWeave reported a deal with OpenAI worth as much as $4 billion to rent out computing power to process artificial intelligence demands. Meanwhile, CoreWeave’s first earnings report this month showed solid revenue growth and customers like Microsoft Corp. have recently pledged to keep spending heavily on AI computing.

The bullish sentiment around the firm has brought out a growing number of bears, who have been actively shorting into the rally and are showing few signs of relenting. So far, the company’s believers have been winning out, helped by the relatively limited number of shares available to trade, which can exaggerate share moves in either direction. The stock was up more than 4% in early trading Friday as the broader market fell.

“The risk level is very high versus what I could get investing in Microsoft, for example,” said Pat Burton, senior managing director at Winslow Capital Management.

The tug-of-war was evident this week, when the stock fell 6.7% on Thursday after rising 19% the day before. The shares are now up more than 160% since the firm went public at $40 a share in March. The stock’s recent run is a marked contrast to the mood around the company’s initial public offering, when CoreWeave raised less money than initially planned.

For bulls like Mark Klein, whose firm was an early investor in CoreWeave, the appeal remains strong as a result of growing demand for infrastructure required by AI services. CoreWeave has specialized in marshaling high-powered chips from Nvidia Corp., which held 7% of its shares as of March 31.

“They are in the right industry, they’re the best at what they do, they have huge tailwinds behind them, and they’ve executed,” said Klein, who is chief executive of SuRo Capital.

So far, though, the rally has only increased traders’ appetite to bet against the stock. The percentage of CoreWeave shares that have been borrowed by short sellers — a proxy for the level of short interest — rose from 18% in late April to 45% earlier this week, according to data from S3 Partners LLC.